Monday, March 28, 2011

The budget that George Osbourne presented last week was not particular brave, considering the electoral cycle. Far from being the orgy of cuts that Ed "Edward" Miliband suggested, the fact is that the UK deficit will continue to rise, and the total level of indebtedness is unlikely to fall much, if at all for several years. The gap between the spending programme proposed by Labour last May and the Coalition this March is really pretty small. However this has not prevented Labour -rather foolishly- from hitching itself to a "No cuts" band wagon. The resulting juxtaposition of Ed "Edward" Miliband's speech with a serious riot by extremists was unfortunate, but sadly all too predictable. Miliband -again- demonstrated a lack of judgment that is becoming characteristic of his leadership. Labour has abandoned any sense of economic reality, if they now truly believe that there is any chance of recovering economic stability without bringing the deficit under control- yet that is what Labour are saying: the nasty coalition will take your toys away from you, but Labour will give them back, and- quite possibly- give you even more toys to play with.

Yet it is not only the politicians of the left that seem to be leaving their senses.

For many months now, the UK inflation rate has been way above target and it has been steadily rising. For many months the Bank of England has resisted the pressure to raise interest rates from their historic low level of 0.5%. The result has been that debts have effectively been reduced by inflation, while banks have been able to recapitalise themselves by borrowing at super low rates, but lending at more normal market rates. Meanwhile the government itself has been able to benefit form low borrowing rates, which have been a major factor in the ability of the government to maintain itself.

Yet this subsidy to borrowers: namely the banks and the UK government, has come at the price of penalizing savings. Savers in Sterling have been forced to take negative interest rates for several years now, and the consequence is that it is proving ever more difficult for individuals to provide capital either for a deposit for a first house or for a nest egg for retirement. In short, the low borrowing rates are destroying the ability of savers to sustain themselves. If the price of houses is the most politically sensitive economic barometer, it is clear that the policy of maintaining low interest rates is benefiting to a degree those already on the housing ladder. However the inability to save for a deposit is locking out first time buyers from the market- and the long term consequence of that could be intensely negative for real house prices, as an entire generation finds that they will have to settle for renting a home that their parents would have expected to own.

Since it is the young who will now need to fund their studies out of borrowing, and who will also need to fund their own pensions, something will have to give. We are more or less guaranteeing that the next generation will be poorer than the current one- poorer in terms of disposable income, since more money will be needed to pay for university studies and to build up pension savings; but also poorer in terms of assets, since housing in the medium term will be controlled increasingly by professional landlords rather than by owner occupiers.

All of this was probably inevitable, given the policies of the past Labour government: undermining pensions through over-taxation and then destroying public finances with unsustainable expansion and unfunded pensions. However the inability of savers to get any return for their money is only adding to the long term problem. The prospects for the next generation are bleak.

Yet the twenty-something "anarchists" of the current student generation are protesting the wrong thing! Instead of insisting on a "no cuts" agenda, they should be campaigning to reduce the fiscal burden of the state that they themselves must carry. Since the state has been forced to reduce support for both education and welfare, it is daylight madness to continue the same tax burdens. The burden for the next generation must be lifted: and the best way to do this must be to reduce the costs of the state substantially.

In any event- real anarchists believe that the state should disappear anyway don't they? Or were those rioters simply a bunch of immature trouble makers with no clear agenda except violence?

Tuesday, March 15, 2011

The political discourse of Britain has become gloomy of late. Rational assessments of the position of the country are being drowned in a flood of negativity and invective. Perhaps it is particularly bad at the moment, as we see the bad news from Japan and Libya filling our screens, but I don't really think so. The fact is that the Brits seem to have become more than a little Eeyore-ish in recent years. For example, despite the clear success of the construction work on the Olympic park, were are encouraged to complain that the games will crowd out London, that things won't be that good and so on. In fact London seems set to give a games that will have a lot more heart than the vainglorious Beijing Olympics, and a lot more commercial nous than the incomplete Athens Olympics. Britain is not a failing country- it is a modern and successful country, for all the various problems that we face.

Yet, of course there is the terrible word "still", as in Britain can "still" do things. The implication is obvious: that once we were better, that once our pre-eminence was unquestioned; that we are country in decline, with no means of recovery. The fact is that this backward looking vision to a mythical past is what taints the whole world view of the UK. Political commentators, like the idiot Simon Heffer, can write eulogies to the pre-decimal monetary system actually complaining that we made the change! This is conservatism ad absurdam. If these people had their way, then Britain would be fossilized in some fabricated 1950's past. Instead of the clean air act, Heffer would have us retain the pea soup fogs (in reality smogs) that were so poisonous that thousands of people were killed and millions more had their health undermined. The fact is that steam trains may have been pretty, but they were staggeringly inefficient and thoroughly dangerous- but in his heart of hearts Heffer resents any change and would thwart it if he could.

The nature of our lives implies that things change, and the conservatism of either right, or indeed the Trade Union driven conservatism of the left tries to deny this natural process. Instead of pretending that all change is bad, and therefore becoming anxious or even depressed when it inevitably occurs, our political leaders (and commentators) would be better off putting forward a positive, hopeful, case for change. Instead of pretending that our membership of the EU is an overwhelming evil, it would be better if we adopted a genuinely sceptical approach: seeking to shape the organisation in a positive way. Yet the so-called euro-sceptics are not merely sceptical, they are hostile, and in their determination to paint the EU black, they lose the intellectual argument.

Likewise the case of electoral reform is intellectually unanswerable, but by promoting fear and a certain sense of helplessness, the "antis" play on a fear of change- any change. This is dangerous.

Despite the Prime Minister's own opposition to electoral reform, it is hard to tar him with the same brush as the antediluvian Luddites of the Telegraph. His vision of building social trust, which he calls the "big society" is indeed a programme that looks more towards hope than fear. The idea that people will create community initiatives because they want to, rather than because they are told to is actually rather laudable, despite the Bronx cheer it has received from commentators across the political spectrum.

Meanwhile the grit that Nick Clegg has shown in the face of virtually intolerable abuse is also a sign of political courage. The speech he made at the Lib Dems spring conference was characterised by the media as somewhat defensive, but I did not detect this. Rather I saw a leader that was facing pretty bleak times determined to maintain focus and eventually to lead his party and his country into better times.

Naturally such optimism was greeted with a cynical smirk by those who prefer a mythical past to the opportunity of the future.

Monday, March 14, 2011

I have blogged on the subject of Earthquakes a few times over the years, the last time was during the General election last year. The fact is that several major cities: San Francisco, Istanbul and of course Tokyo, stand in areas of occasionally severe seismic activity. In fact the earthquake that hit Japan was not the one that they expected: along the Kanto fault beneath the City of Tokyo itself, but rather along the plate boundary, somewhat out to sea from the Japanese archipelago. Nevertheless the 'quake when it hit was huge: probably the largest in recorded Japanese history, a possible 9.0 on the Richter scale. As I feared in May, the devastation- largely caused by the tsunami that followed the earthquake itself- has indeed dominated the news agenda. In fact the wall-to-wall coverage of dramatic footage: the quake, the tsunami, the aftermath, and now the explosions at the nuclear stations that have been wrecked by the catastrophe has formed a weird kind of disaster porn.

It is impossible to draw too many conclusions from this event- dramatic in scale though it is. After the Christchurch 'quake, the Sendai 'quake may not be the last: some seismologists predict a cluster of moderate to severe quakes all around the "ring of fire". So as Los Angeles and San Francisco await another "big one", it may be that the horrid sights of Sendai may yet be repeated on the other side of the Pacific. Yet the time scale of seismic activity is not yet understood- we already know what is likely, but not when it is likely to happen.

For me, the media- especially television- coverage has hidden more than it has revealed. Two minute interviews can barely scratch the surface, especially when both TV and print media seem to assume that no one has passed basic geography, so they have to explain plate tectonics before establishing information on more specific issues. The point is that even the so-called "educated" newspapers assume that few of their readers have even basic knowledge. The result is that they concentrate on the striking image, leavened with human interest stories of dramatic rescue or tragic loss. Paradoxically the big picture itself is lost in the rush to draw short term conclusions based on simple but powerful images. The crisis at the nuclear stations is clearly severe, and will have a long term impact on Japanese demand for energy in the international market, but the explosions, though dramatic, may not tell the whole story: the wholesale abandonment of nuclear power by states not in seismic zones may not be the right lesson to draw. Yet the media will focus on the emotional impact of the images, and doubtless create the sum of all our fears from the result.

An Earthquake is an event outside of human control- yet the media had already abandoned the Libyan revolution- currently being crushed by the tyrant Gadaffi. The attention span of television these days seems to be about 10 days and despite being an avoidable act of evil, the energy of the media for the Libyan story was already dissipated. Of course the murder by Gadaffi's goons of various journalists may have put them off a bit- but all the more reason to report the plight of those in the path of the murderers, one might have thought. Likewise the growing crisis in Russia might have merited some attention, but again the story is too complicated to convey in simple images and direct "human interest" stories.

I expect that the media will hang around Japan for a few more days, and then, subject to no further disaster, they will fold their tents and decamp to some other place of simple images. Meanwhile, the global public will have feasted on the kind of imagery that is familiar from so many disaster movies and the Japanese will return to burying their dead without the high intensity lamps of the cameras upon them.

Friday, March 11, 2011

As the Libyan despot Gadaffi murders his way across the wreckage of his country, it is beginning to look as though the rebellion stands on the brink of defeat.

While Britain and France are trying to muster support for the interim government in Benghazi, continued air raids and merciless attacks with heavy weapons are slow prizing away their grip, even on the eastern half of Libya. It is an appalling situation.

In the face of this obvious crime, President Obama seems content to pose as a neutral- seeking a no fly zone- when the time has long past where this would be successful- or other measures that might have the support of the United Nations. Yet the UN is crippled by the determined resistance of the Russian and Chinese governments to international intervention to protect human rights. After all, both Russia and China may face democratic uprisings again soon. Meanwhile the Obama administration, weary of corralling NATO in Afghanistan, does not find any other multi-lateral forum congenial as a platform to wrest Libya from Gadaffi's grasp.

If Gadaffi wins, it will be a message to the other shaky Arab despots: Mubarak and Ben Ali were wrong to flee, the only way to meet the challenge of democracy is with unlimited violence.

This is a serious test case for President Obama. If he fails to engage with the Libyan rebellion until it is too late, he will have "lost Libya" and will find a brutal and wealthy enemy prepared to fund opposition to the West with all weapons at their disposal, up to an including terrorism. He will be abetting further crimes by the despotic regimes, and he will be opening himself up to his domestic enemies who will regard his "too little-too late" approach as indecisive at best, cowardice at worst.

Perhaps some might see it as somewhat ironic that the European powers- generally reluctant to support the overthrow of Saddam Hussein- are making the running in the potential overthrow of Gaddafi, while the US is hanging back. In fact, a victory for Gaddafi would be a calamity for Europe: a humanitarian crisis on Italy's and Malta's doorstep, and a Libyan leadership which would be -quite literally- beyond the pale. Yet it would be a disaster for the United States too- and very soon President Obama is going to have to make a decision. As so often in past American presidencies, it is a decision in foreign policy that will prove to be the hinge upon which Mr. Obama's success or failure will hang.

The half hearted, half measures that Mr Obama is clinging to at the moment will lead his Presidency to disaster. Unless he can screw his courage to the sticking place, and show decisive leadership against Gaddafi, then his Presidency, like that of Jimmy Carter in the face of Iran, will be utterly ruined.

Thursday, March 10, 2011

The murderous regime of the sinister and highly irrational Muammar Gaddafi has turned the full force of its military upon its own people. The horrific attacks on civilians have escalated the death toll into the tens of thousands. Indiscriminate brutality is the order of the day from the despot. This is a regime that has not one shred of legitimacy- it has forfited any right to govern. Yet the Libyan people apparently lack the strength to removed the hated and reviled regime.

Now Gaddafi is bombing his own oil installations, and the impact on the future of his own country is now creating a global challenge. The unrest across the Arab world is damaging the orderly market for oil and gas in a way that could undermine the prosperity not only of the Western world, but the entire world- rich and poor. If the threat of Saddam Hussein's weapons of mass destruction turned out to be a chimera, the threat of Gaddafi's oil destruction is all too real.

In the name of the Libyan people and in the interests of humanity, it must surely now be imperative that the Gaddafi regime is removed- by force if need be.

The fact is that the oil industry- upon which we still insist on placing so much reliance for our global energy needs-is not only under pressure in the Arab world. Russia- currently producing more oil than Saudi Arabia- is also highly unstable. In the past two months the country has exported over $12 billion of capital- and this capital flight, if anything, seems set to accelerate as uncertainty continues over the future political environment. Despite being the world's energy and commodity storehouse, and despite the country now, apparently, being showing the fastest growth in the number of billionaires, according to Forbes, Russia now has a truly shocking gap between the rich and the poor.

Meanwhile the definition of what the Putin regime considers to be "strategic assets" has become so wide that few if any industries remain immune to confiscation - outright theft- by the backers of the Putin regime. The latest asset grab has been in Vodka production, and even the retail sector. There is no defence against the arbitrary actions of a government not subject to the rule of law.

This is not a recipe for success, especially when we recognize how fast the poorest in Russia are dying off. All across Europe there are anecdotes of thousands of Russians seeking new homes in the West in order to escape the pressure from armed goons in the service of the Mafia-state. If anything, the situation is worse than ever before. Russia is already in a crisis.

Elsewhere, in the face of the pressure against the Saudi Royal House, the open unrest across much of the rest of the Arab world, and the civil war in Libya, it is clear that the West faces some truly dramatic and unexpected challenges. However, there is a point in the moral compass that we must not forget, and that is the initial challenge of Gaddafi to all the norms of civilisation.

If we duck the challenge he has set us, then the negative impact in the Arab world may be severe- and all the time, the clock is ticking in Russia. The 2010 oil shock may proven more severe and more long lasting than that of 1973.

Wednesday, March 09, 2011

When Tony Blair was just setting out on his journey up the greasy pole of politics it was said that he received financial support from the wealthy Tchenguiz family. These brothers were certainly amongst the first of the ultra wealthy to give their support to the future Prime Minister.

In office, Mr Blair certainly demonstrated some loyalty to them in return: he actively lobbied the Polish government to back a bid which the brothers' energy company, Rotch Energy made for the Polish Refineria Gdanska. This was to the irritation of the government in Warsaw, who believed -with some justification it may be said- that the Rotch bid was simply a front for larger Russian interests to acquire a strategic Polish asset.

Monday, March 07, 2011

The parliamentary elections in Estonia did indeed deliver the result that I had forecast. The government coalition parties made gains, the opposition Centre Party made losses, yet neither the gains nor the losses amount to a significant breakthrough. The liberal, Reform, party can be pleased to have made gains after an economically punishing few years, although their Conservative coalition partners have slightly more to smile about. By contrast the biggest winners were probably the Social Democrats who nearly doubled their representation at the expense of the Greens and the Agrarians, who did not qualify and the Centrists who lost a couple of seats.

So where does that leave us?

In a word it leaves us "stability". In the face of pretty difficult times, the country has decided to stick with the people and the policies that it knows. On the other hand the rise of the "Sotsid" is a clear warning that there is the potential for a realignment on the left. The coalition will need to rise to this challenge and renew itself before the current Parliament is completed: this is a challenge not just for the Prime Minister, Andrus Ansip, but also for the leadership of the IRL too. The more socially conservative direction that the IRL has adopted was not popular across the party, and that will make it harder for the party to remain fully united.

The Sotsid will be jubilant that their young leader has put their party firmly back on the political stage, but they, having carved out a distinctive position on social issues- and having gained the support of a section of the Russian speakers- will now need to maintain momentum, and this will be hard, whether the SDE joins the coalition- which seems unlikely- or not.

The election was largely fought as a retrospective look at the economic policies of the past few years. Yet the success of the renewed coalition will depend on a new energy and momentum being established in order to face the challenges of the future. It is an open question as to how the old war horses of IRL and Reform can respond to the new situation.

Despite the repeated scandals that have hit Kesk, and its controversial leader, Edgar Savisaar, the fact is that a large number of voters- by no means all of them Russian speakers- have chosen to ignore the allegations, and even the evidence. The position of the coalition may be less secure than it first appears.

Thursday, March 03, 2011

The Estonian general election is coming to a climax, with the election day taking place on Sunday March 6th. Or rather the last election day is on March 6th, because for the past several days, Estonian citizens have been able to vote online. Indeed a record 27.4% of votes have been cast before today- the last possible day to vote online. These e-votes can still be changed, and should a voter change their mind, they may still go to a polling station and this will cancel the e-vote. However very few, in practice, choose to do so. Estonia has broken a new record for the number of voters who chose to participate online, its own record, but also -indeed- a world record.

In the UK, there has been a certain amount of disbelief that integrated voting systems can not be hacked. Yet, it seems strange to me that millions of people in the UK trust the ATM machines of banks to deliver cash or take deposits solely on the strength of a 4-digit PIN. Estonian ID security is much stronger than this, and although there is recognition that no system is perfect all the time, the expectation is that voting online is just as secure as voting in a polling station and rather more secure than voting by post. There is a basic trust in the system, which is why the numbers of online voters has doubled since the local elections last year.

Yet that strikes me as a fundamental contrast between Britain and Estonia: there is an expectation that things will work here, but in Britain, even if they do work, there is an expectation that they will either fail altogether or will be in some material way "sub-standard". This break down of trust is a pretty fundamental problem- and it is corrosive. It undermines individual happiness to a great degree, and it also atomizes society. Although Estonians are regularly recorded as being relatively untrustful and therefore seeming relatively lonely- it is the UK that in practice has the bigger problem.

The election in Estonia is an interesting one. The leading government party- Reform- is a Liberal party, and under Prime Minister Andrus Ansip, it has delivered a responsible economic program. The evidence is that the party will do well. By contrast several parties will not be able to gain enough votes to return to the Parliament- notably the Agrarians who have been hit by scandals and the Greens who have been hit by splits. So the major challenge to the government has come from the the Centre Party- in theory also nominally Liberal, though in practice actually more populist. The controversial leader of Centre, Edgar Savisaar, has faced -apparently well founded- accusations of corruption. Indeed these accusations have become so insistent that even the cosy complacency of the Estonian political class has been forced to face up to the clear implication that significant Russian money has been funding the Mayor of Tallinn and his party.

Then there is the IRL- economically also Liberal, but increasingly they are socially conservative in a country that is- if anything- becoming more open and socially tolerant. I have found it quite odd that obviously liberal personalities, such as the defence minister Jaak Aaviksoo and the former Prime Minister, Mart Laar, have been prepared to make such an issue of things which the Estonian people in general do not think should be in the political sphere. "It's none of their business" is the clear message form Estonians and there result has been a certain estrangement between the different factions of the IRL.

Finally there is a party that- in principle - ought to do well in these elections: the Social Democrats. Yet, their campaign has been rather lack lustre. despite a bright and young leader, Sven Mikser, the party has not it seems made much progress, despite the problems of the Centre Party.

So where does that leave the election result? Clearly there will be a clear-out of several parties, with maybe only four: Reform, Centre, IRL and the Social Democrats making it back. On the other hand, it is possible that several independents, running on a green-allied list may also be elected. Nevertheless, it still seems likely that Reform will probably make gains, while Centre will probably lose seats. The message then is that Estonia will opt for stability and will punish- at least to some degree- the Centre Party. Yet the precise alignment of the new Parliament, and therefore the composition of the government will depend on the voters- and they remain somewhat unpredictable.

However, whatever the final result, the success of the Liberal Reform party remains remarkable: in the face of extremely difficult economic conditions, the imposition of rigorous budget cuts has paid off. Estonia is clearly stronger than it was four years ago- despite the impact of the deepest economic crisis in over 80 years. For that, Reform do seem set to reap the reward. Discipline and focus seem to have earned trust and ultimately votes.

If the UK can not learn from Estonian technology, perhaps it can learn from Estonian policy- that would certainly be my hope when the next British election comes around in 2015.

Wednesday, March 02, 2011

The dead tree press seems to devote a remarkably large amount of space to the opinions of the conceited. Some proclaim their conceit with wit: Julie Birchill for example; some with noxious venom: Jan Moir; yet others are not only conceited but also ignorant and just plain dull: step forward Simon Heffer of the Daily Telegraph.

Today's hurricane of bombastic ignorance covers a detailed and complicated subject that Mr. Heffer knows nothing about, namely high speed rail. In Mr. Heffer's world ignorance of a subject does not preclude having the most forthright and determined opinions. So, despite having no understanding of the economics or the engineering of transport, he is able to share with his readers his clear view that a high speed line in the UK is "pointless folly".

I have no clear idea as to whether or how a high speed rail network in the UK makes sense, but I am equally sure that Mr. Heffer has the same or less knowledge of the subject as I do. I am prepared to consider the argument on its merits. Heffer, however, has MADE UP HIS MIND.

On the other hand, Heffer has made up his mind on quite a few subjects. His considered views on grammar were published last September as "Strictly English: the correct way to write... and why it matters". The problem was, despite his obviously trenchant and settled views, he kept contradicting both himself and the most respected sources on the subject. It was, in short, a classically amateur confusion. Far from revealing himself as an authority on the subject he came across as a slightly bumbling bore.

But then, that is Simon Heffer all over: he confuses having opinions with being right.

Sure he is paid to have opinions, but the least he might do is carry out more detailed research, instead of treating his own ill informed prejudice as some kind of moral compass.

Alas, that is the problem in most of the leadership positions in the UK at the moment. Columnists or politicians do not seek to construct arguments that fit the facts, but rather they select facts to support their own pre-conceived ideas. Evidence based policy making is martyred to the ignorance and populism of soi-disant opinion formers like Heffer, Moir and the whole rank crew.

So in fact I must correct the headline I have chosen for this piece- an echo of Heffer's own piece in the Telegraph today- Simon Heffer is not pointless: he is malign. For as long as we continue to give credence to the witless wittering of this pompously ignorant man, then we are committing ourselves as a society to ignorance and repeated poor decision taking. We, the people, must learn to do our own homework and not rely on the predigested leavings of fools like Heffer and the rest of the them.

If we want to strengthen our democracy we need to do more of our own homework and to seek the advice of the genuinely informed- not merely those with the most insistent views or the loudest voices.

Tuesday, March 01, 2011

Lord Mandelson the former Labour spinmeister has proffered his advice to the son of the outgoing leader of Hell:

"I can hardly believe it" he told the Absolutely Unbiased BBC "If only he had called me for advice, as he usually does"

"I would have made it clear that threatening to torch the whole Earth and drag mortals into the pit of eternal flame might have been presented differently" he said. "The Satanic Princeling and Lord of Pain might have suggested that warming the planet and offering a bespoke punishment service was, in the end, a net positive".

"Colonel Ga-Devil should have emphasized his shared family values, and the dynamically pro-active nature of his commitment to the slaughter of all of his enemies, even unto the last bullet " he said.

Lord Mandelson, long known for being a close advisor to the Horned One, was quick to suggest that the media might have got it wrong over the unrest that has left the eternal Cacophony in its usual tumult.

"Clearly the right wing press have their own agenda in reporting events from the region" he asserted. "In fact the Damned view the rule of the Beelzebub clan as a bulwark against instability and unrest". He suggested that was why the last Labour government had been keen to re-establish cordial relationships with the Masters of Hades.

"For a long period Britain faced repeated attacks - from Irish and other terrorists- that were in large part sponsored by the Evil One and his endless demon minions" He pointed out. "After I persuaded [former Prime Minister] Blair to meet with the Great Tempter in the desert, we were able to conclude a pragmatic deal that would work for us as much as for the Satanic Legion."

"Blair sold his soul at the usual price of 30 pieces of silver, but we also got a real commitment that we would no longer be regarded as the enemy of Satan and all his forces of darkness, but would be permitted to hand over our hostage and more importantly still get BP exploration rights in the Western Desert of the Damned."

"It was a good deal, a fair deal, and the right deal for Britain" He added.

As St Michael and the armed angels of the Almighty sit off the Tarturan coast poised to intervene to preserve Humanity from the rampages of Infernal power, Lord Mandelson remained unrepentant.

"We must see the world as it is, not as we would like it to be". He added "My glorious master, the Archfiend himself has promised me all the benefits of slavery and depravity that lies and treachery can bring and I come out to serve his evil will"